Magnolia Bancorp Reports First Quarter 2025 Financial Results with Increased Interest Income and Net Loss

Magnolia Bancorp, Inc. reported its financial results for the first quarter of 2025, revealing a net loss of $30,000, compared to a net loss of $18,000 in the same period last year. The company's total interest income increased by 14.4% to $410,000, driven primarily by a significant rise in interest from deposits with other banks and cash equivalents, which surged by 284.1%. However, total interest expense decreased by 6.9% to $81,000, reflecting a reduction in costs associated with Federal Home Loan Bank advances, which were not utilized during the quarter. The net interest income rose to $329,000, a 21.4% increase from the previous year, although the overall financial performance was impacted by a 24.1% rise in non-interest expenses, totaling $376,000.

In terms of asset management, Magnolia Bancorp's total assets decreased by 13.9% to $37.9 million as of March 31, 2025, down from $44.0 million at the end of 2024. This decline was primarily attributed to a 48.9% drop in cash and cash equivalents, which fell to $5.1 million. The company’s loans receivable increased slightly by 0.7% to $30.8 million, with total loan originations rising significantly by 354% compared to the same period last year. The company’s focus remains on originating fixed-rate one- to four-family residential mortgage loans, which constituted 93.6% of its total loan portfolio.

Strategically, Magnolia Bancorp completed its conversion from a mutual to a stock form in January 2025, which resulted in an increase in stockholders' equity to $20.1 million, a 44.5% rise from $13.9 million at the end of 2024. The conversion process involved issuing 833,750 shares of common stock, generating net proceeds of approximately $6.9 million. The company plans to utilize these funds to enhance its lending capacity and potentially expand its operations through new branch offices or loan production offices in the future.

Operationally, Magnolia Bancorp's employee headcount increased to eight from seven in the previous year, reflecting the company's efforts to bolster its workforce in light of its recent conversion and growth strategy. The company continues to focus on maintaining strong asset quality, with only four loans totaling $345,000 reported as 30 days or more delinquent as of March 31, 2025. The management anticipates that the recent reductions in federal funds rates will eventually lead to a decrease in funding costs and an uptick in demand for fixed-rate loans.

Looking ahead, Magnolia Bancorp aims to continue its focus on originating residential mortgage loans while also modestly increasing its commercial real estate and multi-family residential loan portfolios. The company expects to face challenges related to rising non-interest expenses due to its transition to a public company and the need for additional personnel. However, management remains optimistic about the potential for improved financial performance as market conditions evolve and interest rates stabilize.